We've been here before and we'll be here again, but each time feels like a surprising new twist on what we think we know about bond market motivations. The key word is "repricing," and we're not talking about lender rate sheets. In this context, repricing refers to a broad understanding among certain market participants that rates need to move higher than they're reasonably able to move in one trading day. This results in seemingly paradoxical weakness that's not obviously connected to data or events in a timely way. Granted, data and events can help explain the weakness, but only in hindsight. In other words, this is the type of selling momentum that sends analysts looking for explanations as opposed to the type that follows logically from new developments in data and events.
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- Durable Goods
- 0.2 vs -0.5 f'cast, -5.6 prev
- Nondefense, excluding aircraft
- 0.9 vs 0.0 f'cast, -0.4 prev
- Durable Goods
Moderately stronger overnight and holding so far. 10yr down 4.7bps at 4.503. MBS up just over an eighth.
Giving up some gains now. 10yr down only .6bps at 4.54 and MBS down an eighth of a point, with several ticks accounted for by illiquidity.
Weakest levels of the day. 10yr up 5bps at 4.601. MBS down almost 3/8ths.
More selling. 10yr up 7.6bps at 4.626. MBS down 3/8ths+